The Messy Link Between Slave Owners and Modern Management

Harvard-Newcomen Fellow Caitlin C. Rosenthal studies the meticulous records kept by southern plantation owners for measuring the productivity of their slaves, some of which were forerunners of modern management techniques.

by Katie Johnston

Caitlin C. Rosenthal didn't intend to write a book about slavery. She set out to tackle something much more mundane: the history of business practices. But when she started researching account books from the mid-1800s, a period of major economic development during the rise of industrialization in the United States, Rosenthal stumbled across an unexpected source of innovation.

Rosenthal, a Harvard-Newcomen Fellow in business history at Harvard Business School, found that southern plantation owners kept complex and meticulous records, measuring the productivity of their slaves and carefully monitoring their profits—often using even more sophisticated methods than manufacturers in the North. Several of the slave owners' practices, such as incentivizing workers (in this case, to get them to pick more cotton) and depreciating their worth through the years, are widely used in business management today.

"How much more do we need to think about our responsibility to people?"

As fascinating as her findings were, Rosenthal had some misgivings about their implications. She didn't want to be perceived as saying something positive about slavery. On the contrary, she sees her research as a critique of capitalism—one that could broaden the understanding of today's business practices.

The work is part of her current book project, "From Slavery to Scientific Management: Capitalism and Control in America, 1754-1911," and the forthcoming edited collection Slavery's Capitalism.

The evolution of modern management is usually associated with good old-fashioned intelligence and ingenuity—"a glorious parade of inventions that goes from textile looms to the computer," Rosenthal says. But in reality, it's much messier than that. Capitalism is not just about the free market; it was also built on the backs of slaves who were literally the opposite of free.

"It's a much bigger, more powerful question to ask, If today we are using management techniques that were also used on slave plantations," she says, "how much more careful do we need to be? How much more do we need to think about our responsibility to people?"

Absentee ownership

According to Rosenthal, the history of detailed record-keeping on plantations goes back to at least the 1750s in Jamaica and Barbados. When wealthy slave owners in the West Indies started leaving others in charge of their plantations, she found, they asked for regular reports about how their businesses were faring. Some historians see this rise in absentee ownership as a sign of decline, but it is also among the first instances of the separation of ownership and management, Rosenthal says—a landmark in the history of capitalism.

Slave owners were able to collect data on their workforce in ways that other business owners couldn't because they had complete control over their workers. They didn't have to worry about turnover or recruiting new workers, and they could experiment with different tactics—moving workers around and demanding higher levels of output, even monitoring what they ate and how long new mothers breastfed their babies. And the slaves had no recourse.

"If you tried to do this with a northern laborer," Rosenthal says, "they'd just quit."

The widespread adoption of these accounting techniques is partly due to a Mississippi planter and accountant named Thomas Affleck, who developed account books for plantation owners that allowed them to make sophisticated calculations and measure productivity in a standardized way.

Tracking this information allowed planters to determine how far they could push their workers to get the most profit. Using the account books, slave owners could see how many pounds of cotton each slave picked and compare it to their output from previous years—and then create minimum picking requirements based on these calculations.

Looking forward

This led owners to experiment with ways of increasing the pace of labor, Rosenthal explains, such as holding contests with small cash prizes for those who picked the most cotton, and then requiring the winners to pick that much cotton from there on out. Slave narratives describe how others used the data to calculate punishment, meting out whippings according to how many pounds each picker fell short.

Similar incentive plans reappeared in early twentieth-century factories, with managers dangling the promise of cash rewards if their workers reached certain production levels.

Planters also used group incentives to encourage honesty, doling out a barrel of corn to each hand with the caveat that if anything was stolen from the farm and no one turned in the thief, double the value of that corn would be deducted from each of their Christmas awards. Collective penalties would later be adopted by salesmen and companies like Singer Sewing Company to encourage workers to police one another.

Rosenthal says the rise of the railroad is often credited with creating new units of production, including the cost per ton mile, but slavery's comparable "bales per prime hand" unit was developed earlier in the nineteenth century. Comparing the number of cotton bales that different types of workers produced to similar workers on other farms, planters calculated the worth of each slave. A healthy 30-year-old male, for instance, would be considered one worker, known as a hand, whereas a child may be recorded as half a hand, and an older slave might be three-quarters of a hand. Figuring out the total number of "hands" on a farm allowed owners and overseers to compare their results.

The concept of depreciation is also credited to the railroad era, when railroad owners allocated the cost of their trains over time, but Rosenthal notes that slave owners were doing this before then. Starting in the late 1840s, Thomas Affleck's account books instructed planters to record depreciation or appreciation of slaves on their annual balance sheet. In 1861, for example, another Mississippi planter priced his 48-year-old foreman, Hercules, at $500; recorded the worth of Middleton, a 26-year-old top-producing field hand, at $1,500; and gave 9-month-old George Washington a value of $150. At the end of the year, he repeated this process, adjusting for changes in health and market prices, and the difference in price was recorded on the final balance sheet.

These account books played a role in reducing slaves to "human capital," Rosenthal says, allowing owners who were removed from day-to-day operations to see their slaves as assets, as interchangeable units of production in a ledger, instead of as people.

Rosenthal is aware that what started out as a straightforward history of business practices could become highly controversial, with some misconstruing her research as a kind of justification of slavery. Instead, she wants her research to inform managers and companies to become more aware of the complicated legacy of today's business practices and the origins of some their day-to-day management practices.

"I got into this because I followed my sources," Rosenthal says. "I didn't mean to walk into this minefield."

About the author

Katie Johnston is a writer based in Boston.

Comments

Anonymous

Tell me a modern economy not built by slaves.
City states Dubai, Singapore, Hong Kong all part of the racket.

Anonymous

Certainly not a pretty picture of America's pre Civil War
times, but one that every American should be made aware that these were times PAST and not the present.
There is no justification for slavery or treating people badly, but unfortunately, is part of our history.

Anonymous

I think one must be careful not to confuse the evils of slavery with the evils of capitalism, or to imply, as Ms. Rosenthal seems to do, that because the methods developed by slaveowners were advances in capitalism, that creates some indictment of capitalism as it relates to how workers are managed today.

Anonymous

Interesting that she used the term "human capital" in a negative way--"account books played a role in reducing slaves to 'human capital'. This term is used today and is supposed to have positive connotations rather the dated term, "personnel" .

Anonymous

The truth only hurts for a little, but then it sets you free. A "Messy Link" indeed...

Anonymous

I resigned from a company because of the feeling from the owners that employees should be treated second class citizens, reminding them that we were there giving them a chance to work and the constant stupid, non-important paperwork trying to track performance and what the employees did every min. of the day.

Michael P. Hamer

Author, Book: Selling God's Way

Of all the business practices to analyze, this is one of the worst. Are you going to look at the way the Nazis organized and ran concentration camps to gain a greater understanding of operating multiple manufacturing plans. If you want to analyze past business practices to understand how modern management evolved; study the Bible, specifically the book Exodus. There you'll see how God through Moses freed and organized more than a million people for a forty year journey into the Promised Land.

Anonymous

Rather than reading this research as a kind of justification for slavery, Ms. Rosenthal seems to be trying to equate modern management techniques in the current capitalistic economy as being descended from the slave economy, and thus somehow tainted. Should we feel similarly toward jet engines since that technology was developed in part by Nazi scientists? If there are specific management techniques that are worth condemning by all means do so. But connecting otherwise valuable modern management techniques to slavery and to " inform managers and companies to become more aware of the complicated legacy of today's business practices and the origins of some their day-to-day management practices" suggests that these practices should be stopped and is unnecessarily inflammatory.

Anonymous

why is it necessary for the author to repeatedly apologize for her academic research? It's not as if she's advocating slavery. Political correctness is out of control

Suzanne

Owner and Senior Consultant, Timberline Services

Well, this is an indictment of capitalism in a leadership sense... in the sense that those who are "removed from day-to-day operations" are more likely to see their employess as "interchangeable units of production in a ledger, not as people." And as we all can see from the many articles in this series, that is not good for business or for employees. So, to see it aligned in this way is an interesting focus for shifting leadership now. Thanks.

Anonymous

Ms. Rosenthal where she states, "These account books played a role in reducing slaves to "human capital," Rosenthal says, allowing owners who were removed from day-to-day operations to see their slaves as assets, as interchangeable units of production in a ledger, instead of as people," has captured the obvious very well. To infer the business practices of today would or could look at employees in this fashion is a loose assertion at best. I would ask Ms. Rosenthal to take off her 21st century world view glasses and remember she is peering into the 18th and 19th centuries.

Anonymous

Very interesting read. The metric have changed names, but justify the same ends. Labor at the lowest cost to yield the highest returns for those above the glass ceiling ... and yes today one has a little choice in which master to work.

Anonymous

The more we think things have changed, the more they appear to be unchanged. Look at the current dynamics in business and employee interaction today.

It's depressing but factual, the productivity accounting processes were developed under such inhumane conditions.

Even more depressing is the fact that currently, the corporate practices of monitoring human productivity and establishing a value on human capital are equal or worse than those practices during the period of slavery; excluding the whipping, rape, under/no pay, etc.

Historic details of tracking human productivity described through this research is a very sad commentary and i applaud both C. Rosenthal for stumbling into this minefield and K. Johnston for bringing this information to the light for all to understand the unwanted sacrifaces and contributions to America made by slaves during that period.

David Cohen

This is just astonishingly stupid. It aspires to the logical consistency of arguing against vegetarianism because Hitler was a vegetarian.

Anonymous

Slavery still does exist! It is called by a different name now.

Anonymous

Very interesting, the incentive system and the control modern organisations, especially financial services industry have on their employees via "Golden Handcuffs" and performance measurement and reward make performance management almost identical to the plantation tactics becuase people cannot quit at will, due to creature comforts!

Cyndi Simpson

Minister, Unitarian Church of Norfolk

I don't think Ms. Rosenthal needs to apologize for her work or worry that it might be perceived as "supporting" slavery. It's clear that she is documenting ways of controlling labor that have been used by the unscrupulous.

It makes me nauseous that modern corporations are using techniques learned through experimentation with slaves.

This is valuable information and I look forward to reading her work.

grahamsw

This kind of record keeping goes back long before slavery in America. Think Doomsday Book, think Sumerian cuneiform tax records. More recently, during the agricultural revolution in the 17th & 18th century "improving landowners" did as much of this as they could.

Seeing this as rooted in American slavery seems quite provincial.

Anonymous

If there are similarities between the current management practices and the period when slavery was rampant, so be it. The Author need not be apologetic about it. I guess the basic rules of managing people remain the same!

Mark Harbor

Senior Quality Engineer, RSRL

I think that where Caitlin may be coming from is the realisation that current business/management practices, with the sources she identifies, have the result of dehumanising people; something that is dangerous to do in the modern, knowledge economy. Fascinating stuff

Kapil Kumar Sopory

Company Secretary, SMEC(India) Private Limited

This article reflects the inhuman treatment meted out to the blacks in America who were neither given proper wages nor any liberty to live a reasonably normal life due to excessive demands raised on them by their rich employers.
Similar scenario has and is existing in many parts of India.
Equality and human rights professed by authorities are not seen on the ground and the gulf between the rich and the poor has not narrowed.

Thomas Gaal

citizen

I think it is worth a discussion if a management think tank like Harvard should publish this. From the utilitarian point of view, this is good information. But it is morally wrong to use this information in a modern context. Slavery was wrong, and we should have no benefit from any of it's legacy. There are examples in modern times of people be oppressed and governments inhumanely abusing them. Nazi and Japanese concentration camps were also the sight of some hideous experiments on human beings. The documented results of these experiments were used after World War II by scientists from the victors because they had benefit from that knowledge won through the experiements. This is also a utilitarian view, and this is also morally wrong. What would Professor Sandel from Harvard say? I am reading his bood "Justice" at the moment. Can you, Ms. Rosenthal, talk to him? Thanks. Thomas

Anonymous

A human being is in constant mode of "wanting". This was/is/will be instilled in everybody's nature - no exception. Parameters of this mode, change constantly over time from salt to silver, from cotton to aluminum, from gold to oil...etc. Of course manners in achieving these goals differed as well from time to time. However one single undeniable fact remains that in times of desperation (supply shortage) there are no limits to what a human can/will do, things far worse than slavery. Modern examples of such "modes" are deployment of our troops in Saudi, Iraq, Kuwait and Arabian Gulf so that someone else is kept in a monarchist/oppressive rule in order for us to meet our needs. And please do not tell me we liberated Iraq...

Francis Hilotina

Technical Specialist, San Miguel Foods, Inc.

Her research seems to be verifiable, so 'a messy link' attribute somewhat connotes plain rejection in defense of commonly held traditional thinking written in books. Like faith, controversies, debates, interpretations, etc. all give rise to a multitude of different religions. Business evolution is as old as human history. There's just so much to learn and depending on every new information, unlearn!

A worthwhile study, insightful and disrupting, but adds value to good learning just the same. Thumbs up, Ms. Rosenthal!

Anonymous

In that light, many corporations today treat employees like slaves to a certain extent - willing slaves. It will be interesting to understand not only our history, but also how far different companies / countries have or have not gone from slave-management practices and mind-set.

History often repeats itself. Although not out in the open, human slavery is still rampant in various countries today. It has not vanished from the fabrics of society. Shadows of slavery can still be seen in how we think and behave in this century - even in the business sphere.

Peter McCann

President, McCann Corporate Consulting Associates

Interesting, good research. Of course, Karl Marx was right: the source of all wealth is labour. The Soviets in managing the gulags, 200 years later, did calculations along these lines.

About 2,200 years ago the Roman and the Chinese empires were about the same size, in territory and population, and both kept meticulous, detailed records with standardized units.

The point is that every organization larger than what can be managed by walking around is inclined to engage in record-keeping and analysis, and when the manager must report to an absentee owner or imperial head office the organization is compelled to engage in record-keeping and analysis.

Rosenthal's research does not justify slavery; her research shows that slavery became a large, complex organization with reporting and analysis requirements. The odious nature of slavery or the gulags or the majesty of the Roman and Chinese empires are relevant to our moral view of those organizations, however.

Srinivasan

Director, HP

I can understand the reason for Rosenthal consistently trying to make sure that it's not misunderstood as her perspective on slavery, lest this whole research gets misconstrued.

The findings are interesting and worth pondering over.
1. 200 years later today's researcher finds the meticulous science of management in an abhorable practice ("slavery").
2. If we need to not be seen in the same light 200 years down by another enlightened researcher - we need to look at how do we treat our people in today's management.
Hope the prospect of us not being looked at as the next avatar of slave leaders - will make us all look at doing what's right for the broader community, in an much as we all need to build our personal wealth...

robert

I do not understand your comment per capitalism. The following is a partial cut and paste from article.
"Capitalism is not just about the free market; it was also built on the backs of slaves who were literally the opposite of free."
Are you saying Capitalism only existed recently as when slavery or chattle slavery existed in regions of the americas? Capitalism as I see it has been around since before Western Thinking has been noted. I think you are making a mistake by saying capitalism was built on the backs of slavery. Again Capitalism has been around since way before the Vatican gave Portugal monopoly over African Chattle Slavery. Please clarify or let me know what you think.

Paul Boos

Sad, but I can see truth to this account.

I think Frederick Taylor may have arrived at this independently, but the parallels are uncanny. As a proponent for a more humane way of working (=living), I'll love pointing back to the slavery (from a negative sense) ref... THANKS!

Dave Davidson

advisor, Society of Manufacturing Engineers

Dr. W. Edwards Deming's thinking was on similar lines, although without the direct reference to Slave-holder's business practices. SEE: https://www.youtube.com/watch?v=ehMAwIHGN0Y

Anonymous

I think the author is sensationalizing in order to make an impossible leap and link from slave owner applications of accounting principles [simple incentives, data analysis really] to modern accounting and capitalism. The latter has nothing to do with the former. What's next? A study of WWII German prison camps and an indictment of modern German industrial prowess? Oh yeah, that's already been done. Story would have been fascinating enough on its own. Didn't need the extra leap just for pub.

J. Barot

engineer, focal vision

Nothing new. The landlords in China and India did the same. Instead of slaves, they had bonded labor. The slaves were assets, and return on those assets was monitored, especially for the slave trade which was not prevalent in India openly.

In USA, the power of communication and speed popularized those ideas when they were presented as the management (if they were) techniqes. I suspect that Taylor and Ford etc did not learn it from the Slavery System, because there is no record or either of them reading up on what Ms Rosenthall is reading. Many people developed the ideas on their own out of vision or necessity. Just because it existed before, does not mean it is the source of the modern day managerial accounting techniques. That is nonsense.

Mordecai

In response to Robert's note, I believe the author means modern day, free-market capitalism. But, as you say, capitalism has in some form been around as long as men have found ways to "profit" from their transactions. At the same time, slavery and "bonded labor" have been right there with capitalism every step of the way.

What frightens me is the new push from CEOs to get the retirement age in the US moved to 70. All well and good for CEOs making millions to force labor to work further into life while they enjoy the fruits of others' labor and retire at early ages with platinum trimmings. While I plan to retire well before 70, it's so that I can move toward activities that contribute social and spiritual value, not shareholder value.

Anonymous

I cannot agree more with this findings,this is what the reality which we living in now. And as far as the research is concerned, also shows that there is no hope that we can yearn from the system which standing on the same foundation.

Tijan Watt

HBS '07

It' good that more research is being done on the business of slavery, which highlights the cacluating greed that underlay that evil institution. Drawing an analogy to modern human resources management seems to miss the point.

There is however, a mysterious discontinuity between pre and post slavery business in America. For instance, can you name the modern coporation that once owned slaves (Or traded with slave owners)? Perhaps this is what the author is getting at?

Rob Houck

Partner, Eaton & Van Winkle

Slavery has somehow become a theme of my recent reading - 1493, Slaves in the Family and now several books written by Fredrick Law Olmsted (written 1850-1861) about the South - before he turned to designing parks. Then of course there is the movie Lincoln. There is a long article somewhere on the slave bubble in the early 1800's. Mortgages on slaves were issued and put in pools which were securitized and sold to Europeans. When the cotton crop failed, the value of slaves dropped dramatically. Sound familiar? Professor Curt Bogus writes about the "militia" language in the first part of the 2nd Amendment. Who knew that that amendment - probably cited more than any other these days - was assurance to the Southern States that their slave patrols would not be disarmed? As with other forms of energy, there are costs not accounted for. What were the costs of those slave patrols? And more importantly of the fear of uprisings and
of dehunanization of both master and - to a lesser extent - slave. As with the still polluted streams of Pennsylvania, the legacy of slavery continues to pollute our country. A high price.

Phil Clark

Clark and Associates

This is an interesting discussion. It also raises more interesting comparisons. Is capitalism really viable in a democratic society? How many constitutional rights do you give up to work for a company? Bill or Rights and see if you can fully express your rights at the company you work at. Should business laws that violate the Bill of Rights be thrown out as unconstitutional?

I only throw this out to caution all of us to be careful comparing business practices with social contracts, behaviors, and philosophies. "Messy" isn't even close to a term I would use when we explore these relationships.

J.D.Bailey

TIA, RIP

"These account books played a role in reducing slaves to "human capital," Rosenthal says, allowing owners who were removed from day-to-day operations to see their slaves as assets, as interchangeable units of production in a ledger, instead of as people."
[IMO] This is regretfully correct, and more regretful still that too many detached wealthy/politicians consider people as productivity assets (slaves). Capitalism is a meritocracy system. People that can exploit the system rise to the heights of the gaming-meritocracy. Exploit of a meritocracy system indicates poor governance a/o criminal activities. All meritocracy systems require a fair and equal chance of victory or success for all participants (people). Capitalism as a meritocracy system requires honesty, loyalty, democracy .... Abuse, treason, exploitation ... of a meritocracy system is a form of tyranny and oppression [like slavery].
Traitors / Criminals without repercussions are masters of people without representation.
Then maybe; for me, "Reality is self-induced hallucination." Personal reality need not be actuality.

J.D.Bailey

TIA, RIP

I forgot to say Thanks for the perspective on slavers and slaves.

Anonymous

I work for an editorial company that measures productivity for example, in pages edited per hour and count teams in terms of full-time equivalents. So, "bales per prime hand" resonates with me. It's quite right when Ms. Rosenthal says it's a minefield she's walked into because now that the link to slavery of productivity practices still observed todayhas been shown, how can managers improve business practices then? I hope Ms. Rosenthal continues her research to provide minesweepers.

Iya Adjua

I'm wondering also about management of human capital in the prison industrial complex as its a definite cheap source of labor.

Anonymous

This research is an interesting study for people who are not aware of pre- civil war business practices, and other things. It is not necessarily advocating slavery. In fact, working for stock options or equity (although not bad) can be thought of as a form of cheap labor, especially the company goes belly up.

Roy Bhikharie

Managing-director, Papaya Media Counseling

No need to apologize for the research results. Rosenthal confirms that the shadow of slavery still permeates most business practices today. If this wasn't the case, the United Nations Millennium Declaration (2000) would not reiterate the importance of developing decent and productive work for youth thirty-five years after the International Labour Convention on the Development of Human Rights (ILO, 1975) stated! Decent work encapsulates employees' aspirations with respect to work, enabling them to balance the demands of work and home life and have opportunities for growth and advancement.

Mabusa Sebobane

Principal Member, Mabusaonline Media

Yes, that is an excellent piece of research. The study of Slavery can explain many of today's Management and Industrial Practices. From this article I find two distinct concepts;

Slave as an Asset

Slave as a Worker

In today's world of business, a slave with certain rights and benefits is referred to an as employee or simply just a worker. His/her worth which determines his/her salary and wages is still being derived in the same way we would that of a slave; age, knowledge, experience, health, physical strength, etc! I want to believe that there were different classes of slaves too!

Anonymous

I can't understand how one can extract "Modern Management Techniques," even in a capitalistic society, from the illegal, hurtful, demeaning practice of slavery. Reading this article left me hurting for the individuals who died from being overworked and beaten and even more for the children who worked from sun up til sun down supporting the family by picking cotton to allow the family to win the "incentive" and a higher quota next year. We must be informed of the past to not repeat it, but caution of the hurt and sorrow of those who feel the pains of the "African" Americans of that era.

Chuck O'Connell

Lecturer, UCI - Sociology

I look forward to reading her work and am wondering what it might add beyond the research done by David Roediger and Elizabeth Esch and discussed in their book The Production of Difference: Race and the Management of Labor in U.S. History. She does appear to reinforce - perhaps unintentionally - the claim of West Indian scholar Eric Williams that much of the original accumulation of capital came from the profits derived from New World slavery.

Anonymous

To anyone who thinks these business practices are not today careening us down the slope to slavery, think Walmart, shipping jobs overseas for ever cheaper labor, the current political campaigns to demolish and destroy labor unions.

RS

Philosopher

What is more interesting is that currently a small portion of the population owns most of the material wealth and resources. In terms of absentee ownership, this gives the small wealthy group of individuals almost complete economic control over the rest of the population. For example, if one person owns insurance companies, car companies, energy companies, etc... this person can set rates based on current wages and effectively control where and to whom the money goes based on systems and groups of people and in some instances down to individuals. In reality this functions as a polyarchy but the idea is essentially the same.

Hugh Quick

Home, None

Well done Dr. Rosenthal. I hope she will find some workable alternative to our present capitalism, I don't know of one. And our present system certainly needs to be up dated, I think that at present the law favours owners over workers to an unjustified degree. I also think that most of the laws were framed hundreds of years ago.

saussois jean michel

emeritus professor, escp europe

this is a fascinating research, I am pretty sure that alfred Chandler would have pushed you despite your findings, it is an important contribution for the economics of slavery

Mark

Two thoughts: one is that "scientific management", i.e., applying analytical thinking to management of workers, has been going on since the dawn of human history in various forms. If you're going to trace this history, you have to got a lot further back than American slavery. Secondly, in fact, there has never been a period of human history in which slavery has not been practiced, including today despite its illegality. It is estimated that under Nebuchadnezzar, the capital of the Babylonian empire's population was about 50% slaves. During the industrial revolution in the American North, following the Civil War, working in textile mills was tantamount to slavery for many women and children.

And for many professionals today, where jobs require constant travel and/or 70-80 hour work weeks, the difference between that and slavery is a free smartphone and organic food. Or rather, just the smartphone; slaves had organic food too.

Ann

Other, BroadVision Marketing

I always wondered about what a farm hand meant. This sure gave me things to think about. Thanks for sharing.

Anonymous

Today's "wealth" built on stolen slave labor are been hidden in intangibles so as not to benefit the descendants of the slaves that built them out of criminal forced labor. Go figure!